When I meet and coach new agents and brokers for the first time I like to ask them about their ‘business plan’. Sometimes I will go so far as to ask to see it. It is interesting to see the strange looks I get; uncomfortable and quizzical would best describe the responses.
The facts of the matter are that most agents and brokers do not have a business plan to help them with their career. Without that plan they struggle to handle all of the following:
- Targets and goals in commissions and listings
- Understanding the pressures and changes in the market
- Taking action towards business improvement
A good plan of this type will take you a few days to a couple of weeks to put together, and that is because it forces you to look at prevailing market conditions and just where you are in the business as a property specialist. It forces you to make decisions.
Whilst the structure of your plan will be relative to your market and your location, there are some clear standards to the process. Here are the bigger ones to handle in creating your business plan for real estate. Consider these issues and questions (they are in no particular order):
- Create a definite mission or vision statement for your brokerage activities. Try and make it special and unique. Get away from generic real estate concepts as there are far too many agents in that category.
- Review and qualify current market conditions. Understanding what is happening in the property market today and your position in it is quite important.
- Define your territory geographically. Set boundaries with roads or locations.
- Define your property type specialty. Understand the property type that you will be targeting. Where is that property type and how will you be attracting the listings? You can set a matrix for each property type and use it to attract business.
- What services will you provide? Typically you will be providing sales and leasing specialist services, but what about property management? Have you got the staff to do the work? Do they have the skills required?
- Define your ideal client given the previous two points. What does the client look like? Where will you find them? Why should they use your services? They are tough questions that require solid answers.
- From the previous points you will require certain resources and levels of staff. You will require salespeople and administrative personnel. The costs of each should be planned and timed for income growth. You will also require a staff retention strategy.
- From these things you can now set some income targets and marketing strategies. Define the property targets in listing terms so you know exactly what properties you require to build commission income. There is a great commission difference between small and large properties, as well as sales and leasing activity. How much will you require of each?
- Do a comprehensive SWOT assessment of your market and your business. Look for all the challenges and the opportunities in a realistic way. Make clear decisions to handle those issues.
- Whilst you will require an action plan to work to, set some clear Key Performance Indicators (KPI’s) to work to in listings and commissions. Split those numbers into the team.
All of these things will require a financing structure. That finance will cost money and your income will have to reach breakeven levels in a particular point in time.
It is easy to see why a business plan is just so important in our industry. It doesn’t matter if you are a single trader or a team leader of many people; the same rules and concepts should be considered. When you set the right business foundations you have something to hold the real estate business together and drive your actions forward. Every top agent or brokerage will have a plan to keep them on track.